UPDATE 10-Oil falls on economic concerns after stimulus rally

(Recasts, updates prices, market activity) By Robert Gibbons NEW YORK, Sept 18 (Reuters) - Oil prices fell on Tuesday,extending the previous session's slide, as investors shiftedfocus from the likely economic benefit of central bank stimulusto concerns about sputtering global economic growth thatprompted the U.S. Federal Reserve to launch its bond-buyingprogram. Also pressuring oil, a senior Gulf source said Saudi Arabiais working to lower oil prices and is producing around 10million barrels per day and that a majority of OPEC members wantoil prices around $100 per barrel and would be increasingproduction over the next few months. "Unless there is a major supply disruption in the MiddleEast, there is nothing to push it higher," said analyst AndreyKryuchenkov at VTB Capital. "Saudi will seek to drive it closerto $100 and everyone knows it." Brent prices rose seven straight sessions before settling2.4 percent lower on Monday, benefiting first from growingexpectations that the Fed would act to bolster the economy, andsubsequently from the actual launch of the stimulus program onThursday after a two-day policy meeting. Brent November crude fell $1.05 to $112.74 a barrelby 12:51 p.m. EDT (1651 GMT), having dropped as low as $112.52. U.S. October crude was down 52 cents at $96.10 abarrel, having swung from $95.39 to $97.23, straddling the200-day moving average of $96.57. The October contract expireson Thursday. U.S. November crude was down 55 cents at $96.40. U.S. total crude trading volumes remained lackluster onTuesday, 38 percent under the 30-day average. Brent turnoveroutpaced U.S. crude, but still lagged Brent's 30-day average by6 percent. U.S. RBOB gasoline and heating oil futurespulled back on Tuesday, after they matched crude futures' 2.4percent drop on Monday. Gasoline's slip on Tuesday pulled it below $2.93 a gallonand under the 200-day moving average of $2.9454.

MONDAY SELL OFF Monday's steep, rapid intraday sell-off left Brent down morethan $5 at the day's low and U.S. crude off more than $4. The sell-off came after Brent and U.S. crude did not extendthe previous week's surge on the Fed stimulus that sent pricesto four-month highs. Traders explained the plunge variously as stemming fromcomputer-based trading, sell stops triggered in a sessioncharacterized by light trading volume on the Rosh Hashanaholiday and from heightened expectations that the United Statesand its allied consumer nations would release oil reserves. The U.S. Commodity Futures Trading Commission said it waslooking into the drop in prices and checking with exchangeoperators CME Group and Intercontinental Exchange. The White House on Tuesday again said that the United Stateswas monitoring the situation and that all options remain on thetable, including a release of strategic oil reserves.

This week's reports on U.S. commercial oil inventories areexpected to show crude stocks rose slightly due to restart ofproduction and refineries that were shut by Hurricane Isaac.

ECONOMIC CONCERNS A stronger dollar on Tuesday also weighed on oilprices, as the euro fell against the U.S. currency asuncertainty about whether or not debt-stressed Spain willrequest a bailout. A strengthened U.S. currency can put pressure ondollar-denominated commodities such as oil. In addition to weak U.S. growth and Europe's debt crisis,No. 2 oil consumer China has sparked concern as the countrytries to keep economic growth on track and deal with disputeswith neighbors. China posted a monthly capital outflow in August for thethird time this year, likely prompted by investors pulling fundsfrom the country in the face of slowing growth and rapidlydeteriorating corporate profits. Anti-Japan protests continued across China on Tuesday,escalating a maritime dispute which has forced major Japanesebrand-name firms to suspend business there. The center of the dispute between the two countries is overan uninhabited group of islands in the East China Sea.

(Additional reporting by Alex Lawler in London and LukePachymuthu in Singapore; Editing by Sofina Mirza-Reid andMarguerita Choy)